Govt likely to clarify stand on KG-D6 gas price tomorrow

PTINov 13, 2008, 05.54pm IST

NEW DELHI: The Government is likely to tell the Bombay High Court tomorrow that USD 4.20 per mmBtu will be the final selling price of natural gas from RIL's KG-D6 fields for the next five years and the same rate will also be used to value the Government's share from the fields.

The Bombay High Court had earlier this week asked the Petroleum Ministry to clarify on November 14 its position on the USD 4.20 per million British thermal unit rate derived from the formula/basis approved by the Empowered Group of Ministers in September last year.

"As long as the crude oil prices average above USD 60 per barrel in the year preceding the sale, the KG-D6 gas will be sold to consumers in all sectors at USD 4.20 per mmBtu," a top official said.

Anil Ambani's Reliance Natural Resources Ltd, which has taken RIL to court claiming 70 per cent of KG-D6's initial output of 40 million standard cubic metres per day at USD 2.34 per mmBtu price, has claimed that the EGoM approved rate was only for the purpose of valuation of Government share.

Anil Ambani was in New Delhi yesterday and met most of the EGoM members including External Affairs Minister Pranab Mukherjee, Fertiliser Minister Ram Vilas Paswan and Finance Minister P Chidambaram to give his views on the matter.

RIL's oil and gas head, P M S Prasad, was also in town yesterday and met officials of the Oil Ministry to discuss technical issues relating to the business.

The official said the Government had intervened in the dispute between the two Ambani brothers as it wanted the stay on sale of gas from KG-D6 be lifted so that the scarce national resource can be used by fuel-deficit industry.

A director in the Oil Ministry and Additional Solicitor General Mohan Parashar, who has been added to the Government's legal team, are likely to be present in court tomorrow to clarify the Government position.